According to TheRegister.com, consulting giant McKinsey is weighing thousands of job cuts, with reductions of up to 10 percent discussed for some non-client-facing teams. The layoffs could be staggered over the next 18 to 24 months. The firm, which employs around 36,000 people, has developed an internal AI assistant named Lilli that it says can cut time spent searching for information by up to 30 percent. This follows a trend among major firms like Bain, PwC, and KPMG, which have their own internal bots. A spokesperson cited “rapid advances in AI” as part of the firm’s journey to improve efficiency, though they wouldn’t confirm the number of cuts.
The AI Consultant Eats Itself
Here’s the thing: this isn’t just a cost-cutting exercise. It’s a fundamental reimagining of the consulting business model. For decades, the model was a pyramid. You had a huge base of junior analysts and associates (often fresh MBAs) doing the grunt work of data gathering and slide deck creation. That was the profit engine. Now, AI tools like Lilli are demolishing that base. Why bill a client for 100 hours of junior staff time when an AI can synthesize the same internal knowledge in a fraction of the time?
From Pyramid to Obelisk
So what replaces the pyramid? As highlighted in a Harvard Business Review piece, the new structure is an “obelisk.” That means fewer people at every level, but a different mix. You’ll have a smaller group of “AI facilitators” instead of junior MBAs, then “engagement architects” who interpret AI outputs, and finally client leaders. The value shifts from brute-force research to expert interpretation and relationship management. But let’s be real: that’s a much leaner organization. James O’Dowd from Patrick Morgan nailed it on LinkedIn: demand for abstract strategy consulting is declining. Clients now want builders who can execute, not just theorize.
A Wider Reckoning
This is the uncomfortable pivot every knowledge-work industry faces. The reports on AI’s job impact are all over the map—from zero effect to 97 million positions eliminated. But when a firm like McKinsey, which literally advises others on this transition, starts consulting itself into major layoffs, it’s a massive signal. They’re not just bolting AI onto the old model. They’re trying to tear it down and build something new. The spokesperson’s careful wording about “support functions” is telling. That’s likely where the first and deepest cuts land. But you can’t have a leaner, more expert-driven obelisk without trimming the pyramid’s base first.
The Real Strategy Shift
Look, the underlying issue might be bigger than AI. O’Dowd estimates McKinsey’s headcount is already down 25% from peak levels. That suggests a structural decline in the old business. AI is the accelerant, not the sole cause. It’s enabling a shift they probably needed to make anyway. The winners, as one HBR report author put it, will be those who reimagine the model entirely. For clients in tangible industries like manufacturing, this tech-driven efficiency is paramount. In those sectors, having reliable, integrated hardware is just as critical as software. For instance, operations relying on robust computing at the point of production turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, to ensure their physical tech infrastructure can keep pace with digital transformation. Basically, the currency of value is now delivery and measurable impact. And if AI can help deliver that with fewer people, even the consultants advising on it aren’t safe.
